Accounts Based Pension

When a member starts an accounts based pension in their SMSF and they are over the age of 65, do they need to declare the pension on their personal tax returns? Is it correct the pension will be tax free for the person receiving that pension if they are over 60?

Is the transfer balance account report (TBAR) something that all accountants/tax agents do in the year a pension commences when doing a client's SMSF annual return (SAR)?

 

When a person aged 60+ receives a complying account based pension it is exempt from tax and no PAYGS summary is issued and no tax is withheld and nothing is reported in a tax return. Its just ignored. If the fund fails to pay the minimum pension it would render the pension non-complying and be taxable. The fund would also be subject to tax on pension earnings.

A fund with some pension attributed income and some taxable income may need to have an actuary certify the exempt % of fund income.

Yes as part of annual tax or pension changes a TBAR report is produced and lodged. It doesnt need to be lodged when the pension commences.

Not all tax agents are SMSF savvy. It is a complex area. The specialised software we use handles many of these compliance issues incl the paperwork matters involved in starting, commuting and managing pensions so they are compliant

 

Ok thanks Paul